Posted
by
timothy
on Saturday June 21, 2014 @12:06AM
from the now-how-much-would-you-pay? dept.

jfruh (300774) writes "When the U.S. government shut down the Silk Road marketplace, they seized its assets, including roughly $18 million in bitcoin, and despite the government's ambivalence about the cryptocurrency, they plan to auction the bitcoin off to the highest bidder, as they do with most criminal assets. Ironically, considering many bitcoin users' intense desire for privacy, the U.S. Marshall service accidentally revealed the complete list of potential bidders by sending a message to everyone on the list and putting their addresses in the CC field instead of the BCC field."

Don't ascribe to malice what can be attributed to incompetence. Or maybe a variant thereof. Who knows, maybe people have become so used to social media, that secrecy becomes an afterthought. Maybe the person in charge thought email is just the pre-Facebook version of posting a status update?

Hanlon's Razor is a useful tool...but it cuts both ways. I use it sometimes myself. "Whoops, I didn't realize I was logged into production when I deployed that critical bug fix that isn't scheduled to go until next week! Oh well, at least we won't get called on the weekend about the error that was prematurely fixed..."

Doubtful. Despite the overinflated sense of self importance some people in the BTC community have, the federal government does not care all that much, They just want BTC trading to follow the same rules as other commodities, that is pretty much it.

Hacker: Who else is in this department?Sir Humphrey: Well briefly, sir, I am the Permanent Under Secretary of State, known as the Permanent Secretary. Woolley here is your Principal Private Secretary. I too have a Principal Private Secretary and he is the Principal Private Secretary to the Permanent Secretary. Directly responsible to me are ten Deputy Secretaries, 87 Under Secretaries and 219 Assistant Secretaries. Directly responsible to the Principal Private Secretaries are plain Private Secretaries, and the Prime Minister will be appointing two Parliamentary Under-Secretaries and you will be appointing your own Parliamentary Private Secretary.Hacker: Can they all type?Sir Humphrey: None of us can type. Mrs Mackay types: she's the secretary.

But... but.. a sectetary is exactly the right person to trust with a secret."Secretary - late Middle English (originally in the sense ‘person entrusted with a secret’): from late Latin secretarius ‘confidential officer’, from Latin secretum ‘secret’, neuter of secretus"

My thoughts were more pedestrian, nothing sinister, my thinking is that some one wants a few more dollars by hyping the sale; maybe? But then again never substitue malice when simple stupidity makes sense.

Its a bit like the Nixon White House tapes https://en.wikipedia.org/wiki/... [wikipedia.org] and a ~18 min gap was a "a terrible mistake" by a staff member using the stop button vs record button.
Mistakes happen but at that level of US gov - you would see a lot more over a wider more random set of everyday tasks. The very public error seemed to be worth it for some aspect of bitcoin?

I once compared the bitcoin forums to Tartuga from Pirates of the Caribbean. Everyone agreed. Everyone scams everyone, nobody follows the laws, and you have to be smart to not get burned. Those are the people bidding on these. The last thing you want to do is expose their contact info to each other. They just started World War III in the bitcoin world. Close up your storm shutters because there's a shitstorm blowing in.

Good point. That would almost be reasonable, if the proceeds weren't going to the police doing the seizing. If the system were set up so that the proceeds went, for example, into paying back social security, or to pay for services or toys or whatever for orphans... For that matter, if there were just some laws preventing police officers from profiting directly from seized property (no more bonuses to officers, no more first pick of auctioned property, etc.), the situation might be improved. The fact is, fou

I don't get it, why are they auctioning money? Why don't they just exchange them for USD? They will necessarily get less than the market value for them, because nobody would buy money for more than it's worth...

Many video games also have some sort of gold coins. Can they be considered as money too? Bitcoins are mainly used for transferring money from one location to another using computer networks. So it's just an internet version of a credit card company. If so, why should be worth tens of billions of dollars?

For the same reason gold served as money for thousands of years; for the same reason you let your employer (via the bank) pay you in 6.25x2.75 strips of colorful paper; for the same reason you carry a credit card; for the same reason some pacific island cultures collected cowrie shells: Because someone will give you tens of billions of dollars (actually more like half a trillion total market cap, BTW) in goods and/or services in exchange for them.

Gold has value because of its physical properties, scarcity, and attractiveness. The Bitcoin Network has value because of the ability to move funds from place to place, just like the UPS network has value for the ability to move packages from place to pace. Gold's source of value isn't better than other sources of value, just different. All value derives from people wanting or needing something, and the supply in relation to demand. Demand for the

Fine, but that doesn't change my basic point. Why bother with an auction that will necessarily get less than an open market?

The same reason you wholesale anything; You get a transaction that moves a large volume quickly. Basically all consumer goods you buy in any kind of branded store works this way, Wholesalers, whether manufacturers or a middleman, sell large volume to companies who then take the burden of distribution but reap the benefits of charging retail price and profiting on the difference between that and the wholesale cost plus infrastructure/logistics costs. The wholesaler gets the benefit of moving a large volume at an agreed upon price and not having to worry about inventory control, distribution, or logistics of getting it to the consumer.

This is not strange, or even strange at all. Side benefit in this case, they get the auction entry fee from everyone bidding regardless of whether they win and also a look into who is interested in amassing a large quantity of bitcoins.

Maybe because by actually converting the currency to money, they're sending the message that they accept it as real money and will use it. It gives a aire of legitimacy to it they don't want to impart. But selling it is simply offering it and taking what they can get. It doesn't say that they think it's worth anything, just that the bidders do. Kind of like if I took a dirty sock and auctioned it. I can say I believe it to be trash all I want then. If someone pays me $10 for it, it doesn't mean it's really

With a few exceptions like stocks (which are sold on the open market, since it's very established and liquid), law enforcement sells things by auction. In some jurisdictions they're required by law to sell things at public auction with a certain notice period, because it's considered more transparent. So if they seized 100 bikes this month, they sell them at the monthly police auction, rather than trying to find a used-bike shop to sell them to.

There have been problems in the past with government agencies pricing things low and employees snatching it up before the public was able to. So laws require most thing being sold to other than another government agency to be sold at public auction.

All us/.-ers, being highly experienced software jocks, know perfectly well that anything sent in an email might as well be posted up in Times Square. It might have made it a bit more difficult for the bidders to find out the names of the other bidders, but even if each one were sent a separate, one-address, email, the info is on servers all over the place (insert lame joke about asking the NSA for the other bidders' emails).

Actually no, these are the idiots who come and seize your property with little suspicion or on the orders of the jackbooted thugs who want your stuff and sell it off without due process. They're the ones what to make your decisions on everything, to make sure that big brother is watching you and taking all of your hard fought earnings all in the name of social justice where your individuality doesn't matter but the collective good does. Of course by collective good that means you don't keep anything you e

Since I have never been involved in government auctions and I am not seeing anyone comment, what is the standard here? Is there an expectation of privacy? I have never heard of these auctions billed as being anonymous before. So are we basically talking about little more then a minor social mistake?

Here is a textbook case of applying the Capability Immaturity Model [wikipedia.org]. My suspicion is the US Marshals Service [usmarshals.gov] is Level 0, but for the paranoid among us, Level -2 seems reasonable.
According to CMU-SEI data, over 70% of all software organizations are at Level 1 (Chaotic) of the Capability Maturity Model. In reality many may lie below the merely chaotic, but no lower levels exist in the CMM.